Last year, Netflix announced the launch of their internal game studios, with several mobile titles already being a part of the services. The media giant bought three gaming studios in Finland, including Next Games for $72 million, and established an internal games studio in Helsinki, making the city its European gaming hub. Marko Lastikka, a recent executive at Zynga who worked for the Farmville franchise, was invited to head the studio.
Netflix strives to take a leading position in the mobile gaming industry, and they chose Helsinki for a reason. According to the company, Helsinki is a mobile development cluster and the heart of the gaming industry with more than 50 active studios on site. Let’s see what makes Finland such a great entry point for the mobile gaming market, both developers and publishers.
The Finnish gaming industry has deep historical roots. The first game developers appeared here back in the 70s and 80s. Major studios have been opening since the 1990s, including big names like Remedy (Alan Wake, Control) and Housemarque (Returnal, Nex Machina).
Today, the Finnish gaming market is considered one of the fastest-growing in the world, increasing by a whopping 9% in 2020. Offices of the biggest gaming studios in the West are located here, among them Rovio (AngryBirds), Supercell (Clash of Clans), and Seriously Digital Entertainment (Best Friends). Finland is the home of several iconic titles, like Remedy’s Max Payne, Housemarque’s Supreme Snowboarding, and Sulake’s Hotel Goldfish (later Habbo Hotel).
Here are some stats to drive the point home:
What contributes to this growth? There is a range of factors that made the sustainable development of the gaming industry in Finland possible over the decades:
The Finnish government promotes the industry’s growth by sponsoring startups and small game studios. Programs like Entertainment Finland and TEMPO were introduced to help the Finnish gaming industry grow by €50 mln in 2020 despite the worldwide pandemic.
The Finnish game dev market is highly concentrated and diversified:
Support for the game dev industry by the state forms a healthy infrastructure for sustainable business growth. Gaming is the highest profitable industry in Finland that brings taxes like no other: in 2021, the income tax of the mobile game developer Supercell alone amounted to 153 million euros. The company became the largest corporate taxpayer in the country. As a result, Finland is the country with the highest gaming industry income per capita.
Since the release of the App Store in 2009, Finland has been focusing on supporting and investing in app development startups. Mobile game dev has been on the radar for a while since then, and for a good reason: the development costs for a smartphone title are ten times lower compared to an AAA title, but the revenue generated is much higher.
The Finnish mobile game dev market is booming. This growth is driven by a number of factors, including the continued success of top gaming companies, and the increase in the number of startups founded in Finland (over 40% of the Finnish gaming industry). It is easier for small mobile game studios to find investors for product development. Compared to PC or console, mobile games could be made and launched quickly with relatively fast development cycles, low development costs, and reasonable marketing budgets.
Finland may not be the first country that comes to mind when you think about gaming, even though the local developers have proven their talent: the Finnish minds behind the Angry Birds have hooked millions of users worldwide, spawning several games, animated feature films, and becoming a full-blown pop-culture phenomenon.
Other titles like Badland, FlatOut, Legend of Grimrock, Lucius, Outland, Stardust, Snake, and Clash of Clans are also well-known on the market and generator a well-deserved buzz (and revenue).
Finland is also the birthplace of the mobile brand Nokia which had a significant impact on the development of the global mobile device market. Back in the late 1990s, Nokia was the first to release a mobile game on its devices — Snake. Talk about an industry benchmark!
Around 98% of gaming content in Finland is produced for export. That’s because the local market is relatively small, even though it is still attractive for testing and launching new gaming products. 97% of Finns are internet users, and 90.58% use mobile internet daily.
More importantly, more than half of the country’s population (2.8 mln) regularly plays mobile games, with 69% of players making in-game purchases. All this makes for a quickly reachable and perfectly engaged mobile game test audience.
The restrictions caused by Covid-19 accelerated the gaming industry’s growth. However, even after the pandemic, the gaming market and the number of players continue to grow. This is driven by the following factors:
Finland finds itself in an even better position. Gaming and app development industries here are booming:
The Finnish mobile gaming market is the perfect place for game studios with a welcoming government, a developed market, and an audience with high purchasing power. It offers a great platform for testing mobile games and the latest game development technologies.
With this in mind, Netflix’s choice of Finland as its mobile games development hub is not surprising. The question is, what are you waiting for?
This article was originally published on Business of Apps.